US Finance Secretary Scott Bessent, a close aide of former President Donald Trump, recently stated that the European Union (EU) refused to impose tariffs on India over its purchase of Russian oil. The reason, according to Bessent, is that the EU aims to finalize a major trade deal with India. He made these remarks during an interview at the World Economic Forum (Davos).
25% Tariff and India-US Trade
Bessent explained that the United States had imposed an additional 25% tariff on India because the country continued purchasing oil from Russia. The tariff aimed to discourage India from buying Russian oil. He noted that the tariffs have led to a significant reduction in Russian oil imports by Indian refineries.
He also indicated that if India maintains changes in its energy strategy and reduces reliance on Russian oil, there is potential for these tariffs to be removed.
Why the EU Refused to Impose Tariffs
Bessent stated that the EU refrained from imposing tariffs on India because it wants to successfully finalize a “major trade deal” with the country. He also claimed that European countries are cautious about fully enforcing sanctions against Russia to ensure that the India-EU free trade agreement (FTA) can succeed.
European Commission President Ursula von der Leyen described the India-EU trade deal as the “Mother of All Deals”, highlighting its potential to strengthen economic relations between the two regions.
Could the Tariffs Be Removed?
Bessent suggested that if India continues to adjust its energy procurement and reduces dependence on Russian oil, there is a pathway to remove the 25% tariffs. However, no final decision has been made yet.
Impact on India-EU Trade Relations
India and the European Union are expected to discuss a broad strategic agenda during their 16th Summit. If successful, the trade agreement could further strengthen economic and commercial ties between both parties.
Scott Bessent’s statements highlight how geopolitical and trade decisions by the US and EU directly impact India’s energy and trade policies. Tariff policies and trade negotiations are part of global economic strategy and diplomacy, and their outcomes could shape international trade relationships in the coming years.